All Forum Posts by: Teri Feeney Styers

@Nick Calamia you need to add your area to your post subject line - it will get more attention from people in your area. Good luck!

@Lisa Borowy I think there truly are "investor friendly" agents and there are many, many good agents that don't understand investing. So, give the family member a chance by outlining your criteria including how the numbers have to work. If that person doesn't get it - then you can move on guilt free. Make them earn their commission. If they can't answer investor type questions quickly to help you assess a property (especially if they brought you the property) then move on... 

Ok @Zachary Smith - weird coincidence. I was texted by a wholesaler who signed as "Zach"... The Colorado Real Estate Commission has a Contract to Purchase available to download on their website. Be prepared - it is 19 pages long. When I needed one I looked up some sample assignment contracts online and used them as a template to create my own.

I think you texted me Zach and when I pressed for details you didn't supply them. Here's the deal with wholesaling that many wholesalers don't seem to get. Yes, you have to make the contract assignable with added language to that effect in Colorado; otherwise it isn't assignable. But the other thing is: if you are assigning a contract to me you must give me a copy of that contract and that seems to freak people out. But how can I agree to accept the terms of a contract if I am not allowed to see it? So you need a second document - an assignment agreement - this is where you spell out how much I am going to pay you for the contract you are offering. So you come to me with a property that you want to sell for $125,000. You have a contract for $100,000 that I get to see and read and you have an assignment agreement where I agree to pay you (at closing) $25,000 for giving me that great deal. 

@Michelle S. I have done both major rehabs and ground up construction. I have never skirted required permits or planning. It is a pain and does slow the process - but in my area they can shut you down, fine you, etc. I make submissions that adhere to the zoning, setbacks, etc. If you are selling, there may be a state law requiring a longer term warranty on the work. In Colorado there is a one year and six year threshold for new construction. My GC carries the proper insurance to cover this (I carry a builder's risk policy & umbrella coverage during construction). In addition, if you sell to an FHA buyer there is paperwork and warranties involved there. I will also note that as a broker I am constantly looking up permits (or lack thereof) for my investor buyers. I just don't want the liability for myself, my buyers, tenants, etc. for work done outside the local regulations.

@Cameron Fowler well you named 3 very expensive areas... @Danielle Jackson is correct. In addition to school, what type of lifestyle are you seeking? What sort of real estate venture are you looking for? We are a large and diverse state... 

declaring yourself an s-Corp and getting a tax I'd number from the IRS is super easy to do online. Setting up the proper paperwork depends on your state. Start at the secretary of state office. In Colorado also very easy to do. There is usually a short list of docs you need to create. You'll need all this to open a bank account. 

@Tanner Sherman- probably the income from the flips within the "entity" would still be a pass through income like a K-1 or 1099. However, the "entity" can do some pretty tax advantageous stuff to reduce the profits. I am an S-corp and employee of the S-corp. My "boss" (me) makes contributions to my SEP-IRA equal to 25% of my salary and offers a health and life reimbursement plan up to 100% - all of which is deductible to the company (mine). Then I am paid a salary and my "boss" pays the employer half of the social security & medicare (which is not deductible to anyone).

@Ezra Henderson set up as an S-Corp - with flipping there is no need to form a separate LLC for each property. Be sure to add your flip houses to your umbrella policy (don't have one? get one!) and also carry builder's risk insurance on each flip until it sells.

@Russ McKelvey I am a broker here in Colorado. When writing offers for my clients I always include OEC (owner's extended coverage) in the title insurance section of the contract to buy and sell. It usually costs an extra $75 and removes exceptions 1-4 in the standard section B of exceptions. Most of the time I have the buyer pay since it is for their benefit. I also always click on the links for recorded documents - you can find some interesting stuff in there... 

8.1.3. Owner’s Extended Coverage (OEC). The Title Commitment Will contain Owner’s Extended Coverage (OEC). If the Title Commitment is to contain OEC, it will commit to delete or insure over the standard exceptions which relate to: (1) parties in possession, (2) unrecorded easements, (3) survey matters, (4) unrecorded mechanics’ liens, (5) gap period (period between the effective date and time of commitment to the date and time the deed is recorded) and (6) unpaid taxes, assessments and unredeemed tax sales prior to the year of Closing. Any additional premium expense to obtain OEC will be paid by Buyer
Regardless of whether the Contract requires OEC, the Title Insurance Commitment may not provide OEC or delete or insure over any or all of the standard exceptions for OEC. The Title Insurance Company may require a New Survey or New ILC, defined below, among other requirements for OEC. If the Title Insurance Commitment is not satisfactory to Buyer, Buyer has a right to object under § 8.5 (Right to Object to Title, Resolution).